VA Software Reports First Profitable Quarter on 57% Year-Over-Year Revenue Growth

======== ======== ======== ========Net income/(loss) per share: Basic $ 0.17 $ (0.01) $ 0.15 $ (0.04) ======== ======== ======== ======== Diluted $ 0.17 $ (0.01) $ 0.15 $ (0.04) ======== ======== ======== ========Weighted-average shares outstanding: Basic 61,727 61,412 61,698 61,403 ======== ======== ======== ======== Diluted 62,984 61,412 62,837 61,403 ======== ======== ======== ========

VA Software Corporation CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)

Reconciliation of net income/(loss) as reported to pro forma net income/(loss): Three Months Ended Six Months Ended ----------------- ----------------- January January January January 31, 2006 31, 2005 31, 2006 31, 2005 ------- ------- ------- ------- (unaudited)Net income/(loss) from continuing operations - as reported $ 1,072 $ (924) $ (401) $(2,737)Non-cash charges: Stock-based compensation expense included in cost of goods 6 - 20 - Stock-based compensation expense included in operating expenses 144 - 344 - Restructuring cost and other special charges - (101) - (101) Amortization of intangible assets 1 5 2 8 ------- ------- ------- -------Net income/(loss) from continuing operations before non-cash charges $ 1,223 $(1,020) $ (35) $(2,830) ======= ======= ======= =======

Basic net income/(loss) per share - pro forma $ 0.02 $ (0.02) $ - $ (0.05) ======= ======= ======= =======Diluted net income/(loss) per share - pro forma $ 0.02 $ (0.02) $ - $ (0.05) ======= ======= ======= =======Weighted-average shares outstanding: Basic 61,727 61,412 61,698 61,403 ======= ======= ======= ======= Diluted 62,984 61,412 62,837 61,403 ======= ======= ======= =======

VA Software Corporation CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

January 31, July 31, 2006 2005 ----------- ----------- (Unaudited) ASSETSCurrent assets: Cash, cash equivalents and short-term investments $ 43,122 $ 36,614 Accounts receivable, net 4,021 4,306 Inventories 1,491 773 Prepaid expenses and other assets 2,118 1,014 ----------- ----------- Total current assets 50,752 42,707Long-term investments and long-term restricted cash 4,701 2,806Property and equipment, net 579 736Other assets 1,117 1,132 ----------- -----------Total assets $ 57,149 $ 47,381 =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities: Accounts payable $ 2,089 $ 1,574 Accrued restructuring liabilities 1,592 1,748 Deferred revenue 2,153 2,134 Accrued liabilities and other 3,175 2,882 ----------- ----------- Total current liabilities 9,009 8,338Accrued restructuring liabilities, net of current portion 5,311 6,107Other long-term liabilities 1,225 1,271 ----------- -----------Total liabilities 15,545 15,716 ----------- -----------

Stockholders' equity: Common stock 62 62 Additional paid-in capital 784,377 783,891 Accumulated other comprehensive gain (47) (231) Accumulated deficit (742,788) (752,057) ----------- ----------- Total stockholders' equity 41,604 31,665 ----------- -----------Total liabilities and stockholders' equity $ 57,149 $ 47,381 =========== ===========

Contact:Investor RelationsVA Software Corp.(510) 687-8731Email Contact

SOURCE:  VA Software

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